How FIL Capsules Work

A New Way for LPs to Earn FIL Through GLIF+

What are FIL Capsules

A FIL Capsule is an on-chain NFT that encapsulates a predefined amount of FIL inside it, sourced directly from the GLIF protocol treasury.

• The encapsulated FIL can be unlocked by providing a fixed amount of $GLF tokens.

• The encapsulated FIL and required $GLF amounts are set at the moment the Capsule is issued and do not change.

How to receive new FIL Capsules

• As long as your GLIF+ LP Card remains active, new Capsules are automatically issued to your wallet every 2 weeks, and each Capsule remains valid for 30 days.

• You get to decide when or if you want to unlock FIL Capsules

Where FIL Capsule Rewards Come From

FIL Capsule rewards are funded by the GLIF protocol treasury. Every two-week period, the protocol allocates a percentage of its FIL earnings to the GLIF+ LP program.

• The FIL encapsulated in each Capsule reflects your share of total iFIL staked across all active LP Cards.

At launch, 20% of all FIL earned during each two-week period is committed to FIL Capsules.

---

Premium Tiers

Ratio GLF:iFIL	Premium to TWAP
1:1 (minimum)	+1%
Between 1:1 and 100:1	Linear prorated premium from +1% to +25%
100:1 (maximum)	+25%

There are generally 3 scenarios to consider:

1. Ratio below 1:1

   • Your Card becomes inactive until you add more $GLF.

2. Ratio between 1:1 and 100:1

   • Your premium is calculated pro-rata between the minimum and maximum.

   • Example: a 25:1 ratio receives a premium roughly one-quarter of the way between +1% and +25% (i.e., about +7%).

3. Ratio above 100:1

   • Your premium is capped at +25%.

These parameters will likely change as more data is gathered from real usage to support long-term economic durability and sustainability.

---

Example

To illustrate, consider two Card holders: Bob and Alice.

Card Holder	$iFIL Staked	$GLF Staked	GLF:iFIL Staking Ratio
Bob	10	10	1:1
Alice	20	2000	100:1

Determining FIL per Capsule

If the protocol issues 100 FIL total for all LP Capsules during a given two-week period, Alice’s Capsule will contain twice as much FIL as Bob’s, simply because she has staked twice the iFIL.

Determining the Exchange Rate

Your GLF : iFIL staking ratio determines your premium - the amount of $GLF tokens it costs to unlock the FIL inside your Capsule.

In the example above:

• Bob’s ratio: 10 GLF : 10 iFIL → 1:1 → 1% premium

• Alice’s ratio: 2000 GLF : 20 iFIL → 100:1 → 25% premium

Because Alice’s GLF:iFIL ratio is higher, she receives a higher premium above the $GLF market 7 day time weighted average price (TWAP) than Bob. The premium ensures that Alice, Bob, and all LPs receive a better $GLF→FIL rate than the prior 7-day TWAP when they unlock their Capsules, since they are redeeming $GLF directly with the protocol rather than swapping on a DEX.

When you unlock the FIL inside of a Capsule, the associated $GLF tokens used for the unlock are taken from your Card balance. This means that over time, your ratio of GLF : iFIL tokens will decrease unless you add more $GLF tokens to it.

Putting It All Together

Using our earlier numbers, assume:

• FIL:GLF TWAP = 0.005 FIL per $GLF

• 100 FIL is issued across all LP Capsules for that epoch

We can define the Capsules that Alice and Bob receive:

Card Holder	FIL Encapsulation Amount	Estimated Exchange Rate Premium	Exchange Rate	$GLF Required To Unlock FIL	Validity Duration
Bob	33.333 FIL	+1%	0.00505 FIL/GLF	6,600.59 $GLF	30 Days
Alice	66.666 FIL	+25%	0.00625 FIL/GLF	10,666.56 $GLF	30 Days